This year, US consumers will pay over $35 billion in retail membership fees, according to our forecast. Some 53% of that will go to Amazon, making it by far the biggest player. But that doesn’t mean other retailers shouldn’t go after this source of revenues, loyalty, and consumer data.
“Amazon had a 15-year head start on Walmart in this area, so I wouldn’t necessarily count them out just yet,” our analyst Blake Droesch said on a recent episode of the “Behind the Numbers: Reimagining Retail” podcast. Here are four strategies Walmart and other retailers can take to draw paid members.
Retail memberships need to offer more than just retail. Customers expect free delivery, exclusive offerings, restaurant deals, media subscriptions, and more.
Retail memberships allow retailers to glean first-party customer data. Canaves said membership programs should leverage this data by tailoring offers, coupons, and promotions on an individual level based on purchase habits or histories.
When it comes to memberships, exclusivity is key. Product partnerships offer a great way for retailers to show their programs are uniquely worthwhile.
As the streaming ecosystem gets cluttered and subscriptions get more expensive, subscription deals are an appealing option for consumers looking to cut back discretionary spending. Amazon has an advantage in this area as the owner of its own Prime Video platform, but competitors shouldn’t shy away from seeking new partnerships with streamers.
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